Price hike in Spain a return to normal – Aurelius's Díaz Uriarte

Amy King: Why did you decide that now is the right time to open a Spanish office?

Gonzalo Díaz Uriarte: Aurelius has been covering Spain for the last four or five years from the central headquarters in Munich and has three investees in Spain. They've seen that activity has increased in Spain and so has the number of interesting opportunities now that everyone agrees that the macro situation has bottomed, so we should be starting to see steady growth. I'll be continuing what the firm has been doing so far, but being here will let us cover the market with more frequent visits to advisers and companies.

AK: What is your strategy when investing in Iberia?

GDU: The strategy for Iberia is the same as in the rest of Europe. Aurelius is quite a young firm; it was incorporated in 2006 and started investing in the DACH region before expanding its focus to the UK. We are looking for special situations; that encompasses a broad range of circumstances where we might find a deal. To be more specific, we are looking for carve-outs from corporates which may decide that a particular division is non-core or underperforming. We also look at family-owned companies with succession problems, companies with shareholder conflicts or shareholders in financial distress that need to dispose of an asset quickly.

The company has to be underperforming so that we can contribute our financial support as well as our knowledge of operating and managing companies to return them to the EBITDA margins they should have. We are targeting companies with more than €30m in revenues and with EBITDA margins that can range between slightly negative and just below market average. We always target majority stakes and prefer to wholly acquire companies.

AK: A number of private equity firms have increased their staff base in Spain and opened local offices recently, with dealflow increasing accordingly. Pricing has risen as a result of increased competition for assets. Is Spain still good value?

GDU: The target companies we are looking for are selling for lower valuations; we want companies that are not in very good shape and need restructuring. It's true that in general terms the prices have risen, but I think that is reasonable. Valuations are slowly returning to what should be normal pricing levels, as we saw before the crisis. We've gone through a severe crisis and multiples at which transactions were closing were very low, as would be expected. The same thing has happened in the real estate market where the prices are returning to reasonable levels, but it has not gone crazy. I think it has returned to usual levels; I don't think we are facing a bubble here.

AK: There has been an uptick in fundraising in Spain. Do you expect to see increased competition in the distressed space from freshly raised funds? If so, how will you stand out from traditional private equity funds?

GDU: There are few players in the special situations segment; it's a highly specialised segment in which the skillset needed to successfully turn around the company is very different from the skillset needed for traditional private equity.

What differentiates Aurelius is our listed status; we are not a closed-ended fund, making us more flexible in terms of transaction structure, financial commitment and holding period – we don't have to divest after three or four years. We are also able to hold onto companies for much longer. Our reputation in this respect is really important. As we're a listed fund, everything is transparent with access to financial reports and all other information on our website.

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• Southern Europe
• Restructuring
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• Spain